National Insurance if you work abroad
If you move abroad, it can often be advantageous to continue paying your UK National Insurance Contributions (NICs) in order to preserve your entitlement to the UK State Pension and other benefits. If you are working in the European Economic Area (EEA), the rules depend on your situation (see below). The EEA includes all EU countries as well as Iceland, Liechtenstein and Norway. The same rules apply in Switzerland.
The rules are as follows:
If you work for an employer in the EEA: You will ... read more
Tax if you work abroad
If you are leaving the UK to work abroad for at least one year (or permanently), there is a requirement to notify HMRC. This is done using a P85 form which should be completed and submitted to HMRC. You will also be required to submit a Self-Assessment tax return if you usually complete one, for example, if you are self-employed.
The completion of the P85 form will also ensure you can claim any tax refund you are entitled to and will also help HMRC decide how you should be treated for the ... read more
When can you increase your rental income?
The ability to increase the rent on private rentals is driven by the tenancy agreement. This is an agreement between the landlord and the tenant. The agreement can be written down or oral.
The tenancy can either be:
fixed-term (running for a set period of time)
periodic (running on a week-by-week or month-by-month basis)
The type of tenancy agreement dictates when you can consider increasing your rents. For a fixed-term tenancy, you can only increase the rent if your tenancy agreement ... read more
PAYE late filing penalties
There are late filing penalties in place for employers that don’t report payroll information on time. The size of the late filing penalties depends on the number of employees within the PAYE scheme.
Number of employees
Monthly filing penalty per PAYE scheme
1 to 9
10 to 49
50 to 249
250 or more
Payments that are over 3 months late can be subject to an additional penalty of ... read more
When are scholarships taxable as benefits?
The holder of a scholarship is exempt from a charge to Income Tax on income from a scholarship when receiving full-time education at a university, college, school or other educational establishment.
Please note, that the provision of a scholarship to a member of the family or household (usually a son or daughter) of a director or employee by reason of the employment of that director or employee, will give rise to a taxable benefit. Fortuitous awards of scholarships are the only exception to ... read more
Taxation of miscellaneous income
There are special rules, known as the miscellaneous income sweep-up provisions, that seek to charge tax on certain income. This unusual provision, which is broad in scope, catches certain income that would not otherwise be charged under specific provisions to Income Tax or Corporation Tax.
Amongst the types of income covered are:
payment for a service where it was agreed that the service would be provided for reward;
income received under an agreement or arrangement and which is not ... read more
The meaning of goodwill
Goodwill is a term we hear about often, but interestingly, is rarely mentioned in legislation. In fact, the term 'goodwill' is not defined for the purposes of the Capital Gains legislation in TCGA 1992.
Most definitions of goodwill are derived from case law. You could describe goodwill as the 'extra' value attributed to a business over and above a valuation of its tangible assets.
In the vast majority of cases when a business is sold, a significant proportion of the sale price ... read more
What you can do with your pension pot
Pension Wise is a free government service that was launched in 2015 to help provide individuals with general pension advice. However, the service does not answer specific questions relating to your pension. The main advice the service provides is generic and covers what you can do with your pension pot, the different pension types, how they work and what’s tax-free and what’s not.
The website lists the following six options:
Leave your whole pot untouched - You don’t have ... read more
When you can claim back VAT on purchase of a car
There are complex VAT rules that determine the amount of VAT that can be recovered when purchasing a new car. The usual rule is that when you purchase a car for your business then no VAT can be reclaimed.
The main exception to this rule is when the new car is used solely for business use. This rule has been the subject of much case law over the years, but it has generally been established that to qualify for VAT recovery the car must not be available for any private use and you must be able to ... read more
Child Benefit charge if income exceeds £50,000
The High Income Child Benefit charge (HICBC) applies to a parent whose income exceeds £50,000 in a tax year and who is in receipt of Child Benefit. If both parents have an income that exceeds £50,000, the charge will apply to the highest income earner. The charge claws back the financial benefit of receiving Child Benefit either by reducing or removing the benefit entirely.
If you or your partner have exceeded the £50,000 threshold during the last tax year (2018-19) then you ... read more